Guarantor Financial Information | Guarantor Financial Information On April 25, 2014 , the Company issued $900.0 million in aggregate principal amount of the 2022 Notes and on March 26, 2015 , the Company issued $400.0 million in aggregate principal amount of the 2023 Notes. The obligations under the Notes are fully and unconditionally guaranteed by the guarantors, subject to release provisions described in Note 5. In connection with the closing of the Vantage Acquisition, the Company and Rice Energy Operating entered into a Debt Assumption Agreement dated as of October 19, 2016 pursuant to which Rice Energy Operating agreed to become a co-obligor of the Notes and certain entities acquired in the Vantage Acquisition became wholly-owned subsidiaries of Rice Energy Operating and guarantors of the Notes. Each of the guarantors is 100% owned by Rice Energy Operating. The Company is a holding company whose sole material asset is an equity interest in Rice Energy Operating. The Company is a member and the sole manager of Rice Energy Operating. Rice Energy owns an approximate 87.04% membership in Rice Energy Operating as of June 30, 2017 . Rice Energy is responsible for all operational, management and administrative decisions related to Rice Energy Operating’s business. In accordance with the Third A&R LLC Agreement, the Company may not be removed as the sole manager of Rice Energy Operating so long as it continues to be a member of Rice Energy Operating. As of June 30, 2017 , the Company held approximately 87.04% of the economic interest in Rice Energy Operating, with the remaining 12.96% membership interest collectively held by the Vantage Sellers. The Vantage Sellers have no voting rights with respect to their membership interest in Rice Energy Operating. In connection with the closing of the Vantage Acquisition, the Company issued shares of preferred stock to the Vantage Sellers in an amount equal to 1/1000 of the number of REO Common Units they received at the closing of the Vantage Acquisition. Pursuant to the certificate of designation setting forth the terms, rights and obligations and preferences of the preferred stock, each 1/1000 share of preferred stock entitles the holder to one vote on all matters submitted to a vote of the holders of common stock. Accordingly, the Vantage Sellers collectively have a number of votes in the Company equal to the aggregate number of REO Common Units that they hold. The Vantage Sellers have a redemption right to cause Rice Energy Operating to redeem, from time to time, all or a portion of their REO Common Units. Each REO Common Unit will be redeemed for, at Rice Energy Operating’s option, a newly-issued share of common stock of the Company or a cash payment equal to the volume-weighted average closing price of a share of the Company’s common stock for the five trading days prior to and including the last full trading day immediately prior to the date that the member delivers a notice of redemption (subject to customary adjustments, including for stock splits, stock dividends and reclassifications). Upon the exercise of the redemption right, the redeeming member surrenders its REO Common Units to Rice Energy Operating and the corresponding number of 1/1000ths of shares of preferred stock in respect of each redeemed Common Unit to Rice Energy Operating for cancellation. The Third A&R LLC Agreement requires that the Company contribute cash or shares of its common stock to Rice Energy Operating in exchange for a number of REO Common Units equal to the number of REO Common Units to be redeemed from the member. Rice Energy Operating will then distribute such cash or shares of the Company’s common stock to such Vantage Seller to complete the redemption. Upon the exercise of the redemption right, the Company may, at its option, effect a direct exchange of the REO Common Units (and the corresponding shares of preferred stock (or fractions thereof) from the redeeming Vantage Seller. As a result, the Company expects that over time it will have an increasing economic interest in Rice Energy Operating as the Vantage Sellers elect to exercise their redemption right. Moreover, any transfers of REO Common Units by the Vantage Sellers (other than permitted transfers to affiliates) must be approved by the Company. The Company intends to retain full voting and management control over Rice Energy Operating. The Company’s subsidiaries that comprise its Rice Midstream Holdings segment and Rice Midstream Partners segment are unrestricted subsidiaries under the indentures governing the Notes and consequently are not guarantors. In accordance with positions established by the SEC, the following shows separate financial information with respect to the Company, Rice Energy Operating and the guarantors and the non-guarantor subsidiaries. Separate financial statements for Rice Energy Operating will be provided in Rice Energy Operating’s Quarterly Report on Form 10-Q for the three months ended June 30, 2017 . The principal elimination entries below eliminate investment in subsidiaries and certain intercompany balances and transactions. Condensed Consolidated Balance Sheet as of June 30, 2017 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 19,770 $ 108,731 $ (19,154 ) $ 52,193 $ — $ 161,540 Accounts receivable 120 1,804 315,469 22,026 — 339,419 Receivable from affiliates 18,089 1,301 (46,051 ) 26,661 — — Prepaid expenses, deposits and other assets 6,847 21 4,221 258 — 11,347 Derivative assets — 2,294 8,330 — — 10,624 Total current assets 44,826 114,151 262,815 101,138 — 522,930 Investments in (advances from) subsidiaries 3,492,232 4,882,206 724 — (8,375,162 ) — Gas collateral account — — 5,220 112 — 5,332 Property, plant and equipment, net 25,657 — 5,114,594 1,391,137 (85,137 ) 6,446,251 Acquisition deposit — — 18,033 — — 18,033 Deferred financing costs, net — 20,766 — 12,508 — 33,274 Goodwill — 384,431 — 494,580 — 879,011 Intangible assets, net — — — 43,717 — 43,717 Other non-current assets 744 — 45 — — 789 Derivative assets — 23,972 21,741 — — 45,713 Total assets $ 3,563,459 $ 5,425,526 $ 5,423,172 $ 2,043,192 $ (8,460,299 ) $ 7,995,050 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 674 $ 200 $ 11,043 $ 12,214 $ — $ 24,131 Royalties payable — — 104,091 — — 104,091 Accrued capital expenditures — — 120,163 56,431 — 176,594 Accrued interest — 14,208 — 332 — 14,540 Leasehold payables — — 19,538 — — 19,538 Derivative liabilities — 34,458 4,603 — — 39,061 Embedded derivative liability — — — 15,417 — 15,417 Other accrued liabilities 17,748 2,375 53,446 16,625 — 90,194 Total current liabilities 18,422 51,241 312,884 101,019 — 483,566 Long-term liabilities: Long-term debt — 1,281,279 — 318,500 — 1,599,779 Leasehold payable — — 12,279 — — 12,279 Deferred tax liabilities 362,767 — — — — 362,767 Derivative liabilities — 22,091 2,500 — — 24,591 Other long-term liabilities 9,183 — 74,738 6,283 — 90,204 Total liabilities 390,372 1,354,611 402,401 425,802 — 2,573,186 Mezzanine equity: Redeemable noncontrolling interest — — — 396,711 — 396,711 Stockholders’ equity before noncontrolling interest 3,210,729 3,492,232 5,020,771 (138,564 ) (8,460,299 ) 3,124,869 Noncontrolling interest (37,642 ) 578,683 — 1,359,243 — 1,900,284 Total liabilities and stockholders’ equity $ 3,563,459 $ 5,425,526 $ 5,423,172 $ 2,043,192 $ (8,460,299 ) $ 7,995,050 Condensed Consolidated Balance Sheet as of December 31, 2016 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Assets Current assets: Cash $ 2,756 $ 230,944 $ 164,522 $ 71,821 $ — $ 470,043 Accounts receivable 22,525 — 201,122 28,990 (34,012 ) 218,625 Prepaid expenses, deposits and other 2,651 — 2,214 194 — 5,059 Derivative assets — 689 — — — 689 Total current assets 27,932 231,633 367,858 101,005 (34,012 ) 694,416 Gas collateral account — — 5,220 112 — 5,332 Investments in subsidiaries 2,928,250 4,406,023 6,101 — (7,340,374 ) — Property, plant and equipment, net 25,622 — 4,947,518 1,203,047 (58,275 ) 6,117,912 Deferred financing costs, net — 21,372 — 15,012 — 36,384 Goodwill — 384,430 — 494,581 — 879,011 Intangible assets, net — — — 44,525 — 44,525 Derivative assets 138 27,894 11,296 — — 39,328 Other non-current assets — — 614 — — 614 Total assets $ 2,981,942 $ 5,071,352 $ 5,338,607 $ 1,858,282 $ (7,432,661 ) $ 7,817,522 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 926 $ — $ 8,724 $ 8,594 $ — $ 18,244 Royalties payable — — 87,098 — — 87,098 Accrued capital expenditures — — 89,403 35,297 — 124,700 Accrued interest — 14,208 — 232 — 14,440 Leasehold payables — — 22,869 — — 22,869 Derivative liabilities — 72,391 66,997 — — 139,388 Other accrued liabilities 54,064 4,786 84,950 16,219 (34,012 ) 126,007 Total current liabilities 54,990 91,385 360,041 60,342 (34,012 ) 532,746 Long-term liabilities: Long-term debt — 1,279,481 — 243,000 — 1,522,481 Leasehold payable — — 9,237 — — 9,237 Deferred tax liabilities — 26,561 209,276 122,789 — 358,626 Derivative liabilities — 9,766 16,711 — — 26,477 Other long-term liabilities 8,858 — 66,949 5,541 — 81,348 Total liabilities 63,848 1,407,193 662,214 431,672 (34,012 ) 2,530,915 Mezzanine equity: Redeemable noncontrolling interest — — — 382,525 — 382,525 Stockholders’ equity before noncontrolling interest 2,972,578 2,928,250 4,676,393 (270,370 ) (7,398,649 ) 2,908,202 Noncontrolling interests in consolidated subsidiaries (54,484 ) 735,909 — 1,314,455 — 1,995,880 Total liabilities and stockholders’ equity $ 2,981,942 $ 5,071,352 $ 5,338,607 $ 1,858,282 $ (7,432,661 ) $ 7,817,522 Condensed Consolidated Statement of Operations for the Three Months Ended June 30, 2017 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ — $ 348,892 $ — $ — $ 348,892 Gathering, compression and water services — — — 104,324 (66,259 ) 38,065 Other revenue — — 11,350 — — 11,350 Total operating revenues — — 360,242 104,324 (66,259 ) 398,307 Operating expenses: Lease operating — — 17,740 — (95 ) 17,645 Gathering, compression and transportation — — 85,915 — (46,784 ) 39,131 Production taxes and impact fees — — 6,679 — — 6,679 Exploration — — 7,106 — — 7,106 Midstream operation and maintenance — — — 10,714 (2,366 ) 8,348 Incentive unit expense — — 4,663 137 — 4,800 Acquisition expense — — 1,356 1,052 — 2,408 General and administrative — — 25,652 13,574 — 39,226 Depreciation, depletion and amortization — — 141,479 9,332 (4,907 ) 145,904 Amortization of intangible assets — — — 406 — 406 Other expense — — 11,211 1,996 — 13,207 Total operating expenses — — 301,801 37,211 (54,152 ) 284,860 Operating income (loss) — — 58,441 67,113 (12,107 ) 113,447 Interest expense — (23,898 ) 4 (3,375 ) — (27,269 ) Other income (loss) — 201 (20 ) 92 — 273 Gain on derivative instruments — 56,228 47,330 — — 103,558 Loss on embedded derivatives — — — (15,417 ) — (15,417 ) Amortization of deferred financing costs — (2,175 ) — (1,251 ) — (3,426 ) Equity income (loss) in affiliate 137,214 106,858 — — (244,072 ) — Income before income taxes 137,214 137,214 105,755 47,162 (256,179 ) 171,166 Income tax expense (33,917 ) — — — — (33,917 ) Net income (loss) 103,297 137,214 105,755 47,162 (256,179 ) 137,249 Less: Net income attributable to the noncontrolling interests (19,866 ) — — (33,858 ) — (53,724 ) Net income (loss) attributable to Rice Energy 83,431 137,214 105,755 13,304 (256,179 ) 83,525 Less: Preferred dividends and accretion of redeemable noncontrolling interests — — — (20,656 ) — (20,656 ) Net income (loss) attributable to Rice Energy Inc. common stockholders $ 83,431 $ 137,214 $ 105,755 $ (7,352 ) $ (256,179 ) $ 62,869 Condensed Consolidated Statement of Operations for the Three Months Ended June 30, 2016 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ — $ 122,312 $ — $ — $ 122,312 Gathering, compression and water services — — — 58,420 (34,692 ) 23,728 Other revenue — — 9,958 — — 9,958 Total operating revenues — — 132,270 58,420 (34,692 ) 155,998 Operating expenses: Lease operating — — 9,038 — — 9,038 Gathering, compression and transportation — — 51,307 — (24,138 ) 27,169 Production taxes and impact fees — — 2,659 — — 2,659 Exploration — — 5,548 — — 5,548 Midstream operation and maintenance — — — 4,602 (47 ) 4,555 Incentive unit expense — — 14,141 699 — 14,840 Acquisition expense — — — 84 — 84 General and administrative — — 18,351 10,921 — 29,272 Depreciation, depletion and amortization — — 79,516 8,412 (3,176 ) 84,752 Amortization of intangible assets — — — 403 — 403 Other expense — — 11,096 361 — 11,457 Total operating expenses — — 191,656 25,482 (27,361 ) 189,777 Operating (loss) income — — (59,386 ) 32,938 (7,331 ) (33,779 ) Interest expense — (22,853 ) (24 ) (1,925 ) — (24,802 ) Other income — 558 1,991 — — 2,549 Loss on derivative instruments — (75,167 ) (126,388 ) — — (201,555 ) Amortization of deferred financing costs — (1,122 ) — (496 ) — (1,618 ) Equity (loss) income in affiliate (155,200 ) (144,423 ) (61 ) — 299,684 — Income before income taxes (155,200 ) (243,007 ) (183,868 ) 30,517 292,353 (259,205 ) Income tax (expense) benefit — 87,807 84,985 (52,296 ) — 120,496 Net (loss) income (155,200 ) (155,200 ) (98,883 ) (21,779 ) 292,353 (138,709 ) Less: Net income attributable to the noncontrolling interests — — — (17,977 ) — (17,977 ) Net (loss) income attributable to Rice Energy (155,200 ) (155,200 ) (98,883 ) (39,756 ) 292,353 (156,686 ) Less: Preferred dividends and accretion of redeemable noncontrolling interests — — — (7,944 ) — (7,944 ) Net (loss) income attributable to Rice Energy Inc. common stockholders $ (155,200 ) $ (155,200 ) $ (98,883 ) $ (47,700 ) $ 292,353 $ (164,630 ) Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 2017 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ — $ 705,726 $ — $ — $ 705,726 Gathering, compression and water services — — — 193,918 (125,510 ) 68,408 Other revenue — — 17,979 — — 17,979 Total operating revenues — — 723,705 193,918 (125,510 ) 792,113 Operating expenses: Lease operating — — 40,389 — (95 ) 40,294 Gathering, compression and transportation — — 167,810 — (89,253 ) 78,557 Production taxes and impact fees — — 12,832 — — 12,832 Impairment of proved/unproved properties — — 92,355 — — 92,355 Exploration — — 11,118 — — 11,118 Midstream operation and maintenance — — — 19,654 (4,656 ) 14,998 Incentive unit expense — — 7,464 219 — 7,683 Acquisition expense — — 1,563 1,052 — 2,615 General and administrative — — 48,867 24,183 — 73,050 Depreciation, depletion and amortization — — 273,317 18,351 (8,886 ) 282,782 Amortization of intangible assets — — — 808 — 808 Other expense — — 17,256 2,109 — 19,365 Total operating expenses — — 672,971 66,376 (102,890 ) 636,457 Operating income (loss) — — 50,734 127,542 (22,620 ) 155,656 Interest expense — (47,790 ) 3 (6,505 ) — (54,292 ) Other income — 97 219 137 — 453 Gain on derivative instruments — 1,404 87,375 — — 88,779 Loss on embedded derivatives — — — (15,417 ) — (15,417 ) Amortization of deferred financing costs — (3,576 ) — (2,502 ) — (6,078 ) Equity income (loss) in affiliate 107,314 157,179 2 — (264,495 ) — Income before income taxes 107,314 107,314 138,333 103,255 (287,115 ) 169,101 Income tax expense (33,341 ) — — — — (33,341 ) Net income 73,973 107,314 138,333 103,255 (287,115 ) 135,760 Less: Net income attributable to the noncontrolling interests (16,841 ) — — (61,692 ) — (78,533 ) Net income (loss) attributable to Rice Energy 57,132 107,314 138,333 41,563 (287,115 ) 57,227 Less: Preferred dividends and accretion of redeemable noncontrolling interests — — — (28,988 ) — (28,988 ) Net income (loss) attributable to Rice Energy Inc. common stockholders $ 57,132 $ 107,314 $ 138,333 $ 12,575 $ (287,115 ) $ 28,239 Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 2016 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Operating revenues: Natural gas, oil and NGL sales $ — $ — $ 234,754 $ — $ — $ 234,754 Gathering, compression and water services — — — 123,614 (75,334 ) 48,280 Other revenue — — 12,906 — — 12,906 Total operating revenues — — 247,660 123,614 (75,334 ) 295,940 Operating expenses: Lease operating — — 20,109 — — 20,109 Gathering, compression and transportation — — 99,510 — (44,209 ) 55,301 Production taxes and impact fees — — 4,310 — — 4,310 Impairment of fixed assets — — — 2,595 — 2,595 Exploration — — 6,538 — — 6,538 Midstream operation and maintenance — — — 14,224 (47 ) 14,177 Incentive unit expense — — 37,012 1,970 — 38,982 Acquisition expense — — — 556 — 556 General and administrative — — 34,786 19,359 — 54,145 Depreciation, depletion and amortization — — 154,105 15,238 (5,406 ) 163,937 Amortization of intangible assets — — — 811 — 811 Other expense — — 15,499 149 — 15,648 Total operating expenses — — 371,869 54,902 (49,662 ) 377,109 Operating (loss) income — — (124,209 ) 68,712 (25,672 ) (81,169 ) Interest expense — (45,616 ) (34 ) (3,673 ) — (49,323 ) Other income — 748 2,013 1 — 2,762 Gain on derivative instruments — (59,040 ) (72,336 ) — — (131,376 ) Amortization of deferred financing costs — (2,287 ) — (882 ) — (3,169 ) Equity (loss) income in affiliate (174,761 ) (146,077 ) (3,029 ) — 323,867 — (Loss) income before income taxes (174,761 ) (252,272 ) (197,595 ) 64,158 298,195 (262,275 ) Income tax benefit (expense) — 77,511 89,278 (39,918 ) — 126,871 Net (loss) income (174,761 ) (174,761 ) (108,317 ) 24,240 298,195 (135,404 ) Less: Net income attributable to the noncontrolling interests — — — (38,870 ) — (38,870 ) Net (loss) income attributable to Rice Energy (174,761 ) (174,761 ) (108,317 ) (14,630 ) 298,195 (174,274 ) Less: Preferred dividends and accretion of redeemable noncontrolling interests — — — (11,402 ) — (11,402 ) Net (loss) income attributable to Rice Energy Inc. common stockholders $ (174,761 ) $ (174,761 ) $ (108,317 ) $ (26,032 ) $ 298,195 $ (185,676 ) Condensed Statement of Cash Flows for the Six Months Ended June 30, 2017 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Net cash (used in) provided by operating activities $ (32,462 ) $ (48,401 ) $ 315,987 $ 122,833 $ (31,506 ) $ 326,451 Capital expenditures for property and equipment (2,246 ) — (491,768 ) (181,818 ) 31,506 (644,326 ) Acquisitions — — — (3,671 ) — (3,671 ) Acquisition deposit — — (18,033 ) — — (18,033 ) Investment in subsidiaries 26,862 (10,138 ) — — (16,724 ) — Net cash provided by (used in) investing activities 24,616 (10,138 ) (509,801 ) (185,489 ) 14,782 (666,030 ) Proceeds from borrowings — — — 75,500 — 75,500 Repayments of debt obligations (768 ) — — — — (768 ) Debt issuance costs — (1,359 ) — (40 ) — (1,399 ) Distributions to the Partnership's public unitholders — (1,225 ) — (38,977 ) — (40,202 ) Tax distribution to Vantage Sellers 34,228 (34,228 ) — — — — Net cash contributions to Strike Force Midstream by Gulfport Midstream — — — 21,815 — 21,815 Preferred dividends on Series B Units — — — (15,270 ) — (15,270 ) Employee tax withholding for settlement of stock compensation award vestings (8,600 ) — — — — (8,600 ) Contributions from parent — (26,862 ) 10,138 — 16,724 — Net cash provided by (used in) financing activities 24,860 (63,674 ) 10,138 43,028 16,724 31,076 Increase (decrease) in cash 17,014 (122,213 ) (183,676 ) (19,628 ) — (308,503 ) Cash, beginning of year 2,756 230,944 164,522 71,821 — 470,043 Cash, end of period $ 19,770 $ 108,731 $ (19,154 ) $ 52,193 $ — $ 161,540 Condensed Statement of Cash Flows for the Six Months Ended June 30, 2016 (in thousands) Rice Energy Inc. Rice Energy Operating LLC Guarantors Non-Guarantors Eliminations Consolidated Net cash provided by (used in) operating activities $ 10,046 $ (14,481 ) $ 158,472 $ 79,934 $ (31,077 ) $ 202,894 Capital expenditures for property and equipment (15,254 ) — (371,066 ) (129,286 ) 31,077 (484,529 ) Capital expenditures for acquisitions — — — (7,744 ) — (7,744 ) Investment in subsidiaries 55,566 70,047 — — (125,613 ) — Net cash provided by (used in) investing activities 40,312 70,047 (371,066 ) (137,030 ) (94,536 ) (492,273 ) Proceeds from borrowings — — — 120,000 — 120,000 Repayments of debt obligations (690 ) — — (255,000 ) — (255,690 ) Debt issuance costs 32 — — (701 ) — (669 ) Distributions to the Partnership's public unitholders — — — (17,636 ) — (17,636 ) Shares of common stock issued in April 2016 offering, net of offering costs 311,764 — — — — 311,764 RMP common units issued in the Partnership’s June 2016 offering, net of offering costs — — — 164,150 — 164,150 Proceeds from conversion of warrants 100 — — — — 100 Proceeds from issuance of redeemable noncontrolling interests, net of offering costs — — — 368,767 — 368,767 RMP common units issued in the Partnership’s ATM program, net of offering costs — — — 15,782 — 15,782 Preferred dividends on Series B Units — — — (3,576 ) — (3,576 ) Contributions from parent — (55,566 ) 224,627 (294,674 ) 125,613 — Net cash provided by financing activities 311,206 (55,566 ) 224,627 97,112 125,613 702,992 Increase (decrease) in cash 361,564 — 12,033 40,016 — 413,613 Cash, beginning of year 78,474 2 57,798 15,627 — 151,901 Cash, end of period $ 440,038 $ 2 $ 69,831 $ 55,643 $ — $ 565,514 |